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Enterprise Resource Planning (ERP) System

Enterprise Resource Planning (ERP) System. An ERP system is a commercial software package that enables a company to integrate the data used throughout the entire organization. May be the most important development in the corporate use of information technology in the 90s.

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Enterprise Resource Planning (ERP) System

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  1. Enterprise Resource Planning (ERP) System • An ERP system is a commercial software package that enables a company to integrate the data used throughout the entire organization. • May be the most important development in the corporate use of information technology in the 90s. (Source: Davenport, 1998)

  2. Information Fragmentation • Information is typically spread across numerous separate computer systems, each housed in individual function, business unit, region, factory or office. • This results in redundant data, need for reentering or reformatting data, etc. • Interoperability problems exist between individual systems. (Source: Davenport, 1998)

  3. Information Integration • At the core of an ERP software system is a single comprehensive database, which streamlines the flow of information throughout a business. • The database collects data from and feeds data into modular applications supporting virtually all of a company’s business activities. (Source: Davenport, 1998)

  4. ERP Software Modules • Financials • Human Resources and Pay Roll • Distribution/Logistics • Sales & Marketing • Manufacturing • Product Data Management • Material Planning • Resource & Capacity Planning • Shop Floor Management • Quality Management, etc. (Source: Davenport, 1998)

  5. AN ERP SYSTEM Managers and Stakeholders Sales & Delivery Reporting Financial S U P P L I E R S C u s t o m e r s Central database Manufac -turing Sales Force & Customer Service Rep Back- Office Ad and Workers Service Human Resource Mgmt Inventory and Supply Employees (Source: Davenport, 1998)

  6. Big Five - JBOPS • OneWorld (www.jdedwards.com) • BaanERP (www.baan.com) • Oracle (www.oracle.com) • PeopleSoft (www.peoplesoft.com) • SAP’s R/3 (www.sap.com)

  7. ERP Implementation ERP systems • require a major commitment and investment, • often require companies to modify some of their processes to accommodate the software, and • can take a long time to implement. (Source: Davenport, 1998)

  8. ERP & Business Processes • A company often has to modify some of its business processes to accommodate the ERP software system. • The organizational changes resulting from these modifications could easily overwhelm a company. • Furthermore, some of these modifications may not be acceptable to the company. (Source: Davenport, 1998)

  9. Benefits of ERP Systems • Automated update of related information when new information is entered in one module. • Direct access to a wealth of real-time operating information. • These benefits could translate into dramatic gains in productivity and speed. (Source: Davenport, 1998)

  10. Current Trends in ERP Software • Easy-to-install and relatively inexpensive ERP modules. • Enterprise extension software that • plugs “holes” within the factory • expands ERP-style benefits beyond the factory. (Source: Bylinsky, 1999)

  11. ERP Modules vs ERP Systems • ERP modules designed specifically for manufacturers using newer concepts. For example, Pivot.Man from Pivotpoint. • In many cases they don’t force a company to change its operations to suit the software. (Source: Bylinsky, 1999)

  12. Enterprise Extension Software • These hook on to traditional ERP systems as well as to the newer ERP modules. • Within the factory, Manufacturing Execution Systems (MES) bridge the gap between the plant and ERP programs. For example, Dynamic Performance Monitoring (DPM) software from Foxboro. (Source: Bylinsky, 1999)

  13. Enterprise Extension Software (continued) • Front-office and back-office software that extends ERP-style benefits beyond the factory. • An example of a back-office software is CSM (Component and Supplier Management) software from Aspect Development Corporation, for the in-bound supply chain. (Source: Bylinsky, 1999)

  14. Enterprise Extension Software (continued) • On the front-office side, customer relationship management (CRM) is the hottest area. • Siebel systems is a leading manufacturer of CRM software. • The Big Five are also developing CRM extensions for their ERP systems. (Source: Bylinsky, 1999)

  15. e-Commerce • Using the Web and other electronic means for buying, selling and distributing goods and services (Source: Alter, 1999)

  16. Electronic Data Interchange (EDI) • Allows companies to exchange documents in a structured and computer-processable format. • Helps to automate and streamline a business by eliminating or simplifying clerical tasks, speeding information transfer, reducing data errors, and eliminating business processes. (Source: Fu et al., 1999)

  17. e-Commerce • Evolution from VAN-based EDI to Web-based EDI. • Web-based EDI addresses the needs of small and medium-sized firms. • Business-to-consumer and business-to-business. (Source: Fu et al., 1999)

  18. Evolution of e-Commerce • VAN-based EDI • needs considerable infrastructure • application, translation software and communication network • over private VANs • Web-based EDI • low-cost transport mechanism • world-wide connections • XML documents (Source: Fu et al., 1999)

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